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Financial Stability Starts HereAnnual Report 2015

Our CommunityOur jobs are amazing. Every day, we get to come into the offi ce

and change lives. We get heartwarming gratitude, hugs, and

tears on a regular basis. Helping someone make real progress

toward the fi nancial stability of their family is unlike anything

else in this world. We’d like to thank our supporters for keeping

us going; our partner organizations for the critical assistance

they provide; and our clients for being the kindest, most inspiring

people to serve. We’ve come so far—from a Brown University

basement to a nationally recognized CDFI with thousands of

clients—and we could not have done it without you.

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Andy PosnerFounder & CEO

A Letter from the CEOTo the entire Capital Good Fund Family of Board, Staff , Clients, Funders, Volunteers, and Community Partners:

These are turbulent times in America: issues of race, class, wealth, and inequality have entered the national discourse in

a manner we haven’t seen since the sixties. At the same time, however, innovators in the government, nonprofi t, and for-

profi t sectors are discovering new approaches to old problems; programs like the Nurse-Family Partnership, the Family Self-

Suffi ciency Program, and the Social Innovation Fund are proving that by unleashing America’s entrepreneurial spirit we can

successfully move toward a more just society.

In 2015 we embarked on an initiative, the Direct Public Off ering (DPO), that captures this spirit and applies it to our mission:

using fi nancial services to tackle poverty in America. So, what is a DPO and why did we launch one? We recognized that

while we have a business model capable of achieving signifi cant scale, we wouldn’t be able to aff ord to reach that scale on

philanthropic contributions alone. So we did the math, and found that if we did 17,000 loans over fi ve years we would be able

to cover 100% of our operating budget from interest income. Whereas it would cost several million dollars to disburse these

loans, we could actually borrow the money from social investors and pay them back—with interest—over time.

A DPO is a tool that allows nonprofi ts like us to issue debt to those interested in connecting their capital with their conscience.

In our case, we decided to raise $4.25 million from individuals, foundations, and corporations who want to invest as little as

$1,000 and earn up to 6% interest. We, in turn, would use the proceeds to hire 60 people, conduct marketing, and invest in the

back-end systems needed to eff ectively serve our clients. Thanks to the DPO, and the myriad other eff orts we’ve made to grow

and change lives, 2015 was a banner year for us. We worked with over 100 families through our Financial + Health Coaching,

and thanks to a Randomized Control Trial found that the program measurably improves their lives. Initial fi ndings show

data points like a 35% decrease in food insecurity, a 68% decrease in the use of predatory loans, and a 56% increase in bank

account utilization. All of these fi ndings demonstrate that what we do works. And fi nally, we fi nanced 301 life-changing loans

totaling $376,000 for things like vehicle purchase or repair, immigration expenses, and a security deposit on a safe apartment.

Of course, this is not enough. There are millions of families still in need of our products and services, which is why our plans

for 2016 are more ambitious than ever. Thanks to the support of our many donors, investors, and supporters, we are confi dent

that this ambition will translate into real action and impact.

Andy PosnerFounder & CEO

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New Look, New LocationA Friendlier LogoFor many, fi nances are an unpleasant topic. Trying to fi gure out how to pay off past debts, fi x negative marks on a credit score,

or planning for retirement when money is already so tight—these are real problems, and real sources of anxiety for many of

our clients. At Capital Good Fund, we want our clients to feel comfortable. This means making things as simple as possible and

providing patient, compassionate customer service. We decided our logo should refl ect this people-fi rst philosophy, so we’ve

redesigned our image to be more inviting. With bolder, brighter colors and fewer sharp angles, our new logo complements the

friendly service our staff provides to every single client.

®CAPITAL FUND

Now at 22 A Street in ProvidenceLocation is a key part of making things simple and accessible for all clients. At our old offi ce, clients struggled to keep the

parking meters fi lled. They had trouble fi nding us on the third fl oor of a building that prohibited street-level signage. They

had to wait outside for assistance if they weren’t meeting us within traditional business hours or if they needed to use the

handicap-accessible ramp. This wouldn’t do. In November of 2015, we moved to a new offi ce at 22 A Street.

Now, our clients enjoy free parking, obvious signage, and an all-around accessible offi ce. Nobody needs to step out on a

Coaching session to go feed a meter. Nobody needs to worry about waiting outside in the cold. Most importantly, anyone can

show up and receive the life-changing fi nancial assistance they deserve.

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Financial + Health Coaching“Financial literacy” programs have become trendy, and most are predicated on the belief that if only more people understood

their fi nances, fewer would have fallen prey to the predatory practices of many lending and fi nancial institutions. At Capital

Good Fund we do not subscribe to this view. Our philosophy is that, for the most part, people are poor not because they don’t

know how to manage their money but rather because they don’t have enough money to manage. With this in mind, we

designed our Financial Coaching service based on a philosophy of dignity for those we serve and a belief that meeting people

where they are can help to get them where they want to go.

LoansPredatory fi rms like payday lenders have more storefronts in America than does McDonald’s, and they locate their branches

in communities that are low-income and/or of color. They do this because they know that the economically vulnerable

lack access to the mainstream fi nancial system—banks, credit unions, credit cards—and therefore are often left with no

choice but to turn to loans with interest rates in the hundreds of percent. By providing aff ordable small-dollar loans with

interest rates that are a fraction of those charged by our competitors, not only do we save our borrowers hundreds—or even

thousands—but we help them build their credit score and make critical investments in themselves and their families.

Total Coaching Clients in Year2015

2014

2013

2012

2011 0

20

40

60

80

100

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Total Loans Disbursed in Year2015

2014

2013

2012

2011

2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

50

100

150

200

250

300

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Financial + Health CoachingNo amount of financial literacy can overcome the stresses of poverty and financial instability. So why run a financial literacy

program based on the idea that poverty is escapable through proper banking and budgeting? The very basis of our Financial +

Health Coaching program is that being poor is about more than a lack of money; uncertainty, hunger, substandard housing—

these are all the daily realities of those we serve.

This is why the goal of our Coaching is not to simply educate or meet outcomes, but rather to make life better for individuals

and families. Every Coaching relationship starts with a process of understanding what matters most to the client, today.

Sometimes that is dealing with the constant calls of creditors, avoiding eviction, or getting the lights turned back on. We then

set short- and long-term goals—everything from buying a house to going back to school—and create an action plan that is

tailored entirely to the person in front of us. In other words, no two Coaching relationships are the same.

Our amazing financial coaches work one-on-one with their client over the course of a year. They go through the

comprehensive curriculum we developed in-house, covering everything from banking, budgeting, credit, and debt to health

and savings. Thanks to investments we made in our systems, both coach and client now have access to the entire program via

our simple and intuitive online portal, making it easy to keep track of goals, build and maintain a budget, and review countless

worksheets about credit, debt, and a host of other topics. Taken together, our philosophy, curriculum, online platform, and

cohort of highly-trained coaches are what lead to the phenomenal impact we have on the lives of poor and low-income

individuals and families.

FC+ SchoolsTo solve the massive problem of poverty, we need to keep innovating and experimenting. We have a theory: by improving the

health and financial stability of a family, the children will do better in school and have a better chance at escaping poverty

themselves. In 2013, we set out to test this theory. We created the Financial Coaching Plus Schools Program (FC + Schools)

and launched a Randomized Control Trial (RCT) in partnership with Brown University and Providence Public School District. A

treatment group is receiving our rigorous, specialized Financial + Health Coaching, and a control group is not.

The study is ongoing, but our first groups have completed Coaching RCT with really positive results. Treatment families applied

lessons learned from Coaching to increase their usage of bank accounts (15% more than the control families) and decrease

their usage of predatory services (59% less than control). Food insecurity dropped 42% for the treatment group, while control

clients worried more than before. There’s much more data to collect and analyze, but it’s phenomenal progress. If the study

matches our expectations, expect to see FC+ Schools changing lives all across the country.

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125Budgets created

42%Clients’ decrease infood insecurity

68%Decrease in use of predatory $ services

Our revolutionary products and services earned us a spot at the Opportunity Finance Network’s Connect 2015 event!

Finances are confusing for many. Our comprehensive Coaching curriculum clears things up!

Coaching is so much more than budgets. Here’s our team in a nonviolence training to ID and help distressed clients.

In 2015, we followed Nikki throughout her entire Coaching experience. You have to check it out: http://bit.ly/GoNikki

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LoansThe American mainstream financial services industry—banks, credit unions, credit cards—works well for those who have

access to it, enabling them to affordably buy homes or cars, start businesses, and make everyday purchases. Unfortunately, the

tens of millions who have no or poor credit, are underbanked, or don’t meet the other requirements of the financial sector turn

to the $100 billion predatory financial services industry. Consisting of payday lenders, pawnshops, rent-to-own stores, auto

title and subprime auto lenders, and others, these companies drain billions of dollars out of the pockets of hardworking yet

vulnerable families.

At Capital Good Fund we battle this scourge by providing far more equitable alternatives. Not only do we charge interest rates

that are just a fraction of those of our competitors, we also report loan payments to the credit bureaus so that our borrowers

can increase their FICO score. Why is this important? A stronger score means lower interest rates on future loans, of course, but

it also reduces insurance premiums and makes it easier to secure a safe and affordable apartment. Borrowers use our loans to

repair or purchase a vehicle, place a security deposit, cover immigration expenses, purchase furniture or appliances, make their

home more energy-efficient, and deal with emergencies. We are proud of our track record: over 300 loans totaling $377,000

financed in 2015 with a 91% repayment rate. We also launched a new Car Loan product and unveiled an online-only lending

platform that makes it easier than ever to reach borrowers anywhere in Rhode Island. But the best is yet to come: what we did

in 2015 has laid the groundwork for more growth and impact in 2016 and beyond.

Introducing Car LoansJust six years after the collapse of Lehman Brothers, a new subprime market has emerged that targets the working poor and

their need for safe and reliable transportation. According to the NY Times, the current boom in auto lending resembles “the

frenzied subprime mortgage market before its implosion.” In fact, “auto loans to people with tarnished credit have risen more

than 130 percent” in the past five years. As with mortgages, far too many low-income families are being steered into loans

they cannot afford. A NY Times examination found that subprime auto loans “[are] typically at least twice the size of the value

of the used cars purchased.” This results in a surge in people left with damaged credit, repossessed cars, and bankruptcy.

Seeing an opportunity for impact, in 2015 we launched an equitable Car Loan of $8,000 to $13,500 with a fixed interest rate of

9% to 15%. These favorable terms can save borrowers up to $9,000 compared to our competitors and, as with all of our loans,

helps to build their credit score. And while 2015 was a year to pilot the product, we look forward to refining the product and

taking it to thousands of families in the coming years.

777

Hitting the road! Sherlie, our very fi rst Car Loan client, and her daughter smile in front of their new car. They were positively beaming the whole day!

49%More $ �nanced than in 2014

$377kFinanced

73ptsAverage client creditscore increase

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Direct Public Off eringMoney may make the world go round, but how it’s invested determines the kind of world in which we live. Without a

thoughtful investment approach, capital will naturally fl ow toward the highest rate of return—one that far too often comes

at the expense of people and the planet. Fortunately, social investors are increasingly choosing to direct their money toward

projects that reduce pollution, foster economic opportunity, improve educational outcomes, and create aff ordable housing.

At Capital Good Fund, we believe that only by aligning value with values can we ensure a bright future for the Earth and its

inhabitants.

The past few years have seen an explosion in interest in social entrepreneurship, which seeks to balance the generation

of revenue with adherence to a social mission. In 2015, we took a hard look at our track record and fi nancial model and

realized that if we fi nanced 17,000 loans in fi ve years, we could reach a point where 100% of our revenue came from our loan

portfolio. Unfortunately, we also saw that it would take millions of dollars to do so and we simply lacked access to suffi cient

philanthropic funding to pay for the 60 hires, marketing, and back-end systems upgrades we needed to make those loans.

To address this conundrum, we decided to launch a Direct Public Off ering (DPO) in October 2015. Through the DPO, social

investors would be able to earn up to 6% and make a minimum investment of just $1,000. Not only would the DPO enable

us to meet our goal of 100% operational self-suffi ciency, it would represent an answer to a question we often hear: “Where

can I invest my money, earn a decent return, and feel good about the investment?” This one-of-a-kind capital-raising strategy

has another benefi t: it demonstrates an approach to scaling eff ective nonprofi t models that can be replicated by thousands of

organizations without the need to depend on a limited pool of philanthropy.

Families in Need

Investors ®SOCIAL CAPITAL FUND

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I Invested in Good...

Learn More and Invest at:

www.SocialCapitalFund.org

...because I wanted to make a di�erence.Alan Hassenfeld,

Former CEO, Hasbro, Inc.

...because Economic Justice is Economic Security!

Jenn Steinfeld,Executive Director, Women's Fund of RI

...to deliver Equitable Community Progress.

Robert Falcon,Community Member

...because I want to change another 17,000 lives.Barrett Hazeltine & wife, Mary,

Brown Professor Emeritus

...because good means better for more or us.

Sandra Enos,Professor at Bryant University

...because capital needs good.

Mark and Julie Van Noppen,Community Members

1010

Clients by Age

Clients by Gender Clients by Ethnicity

Clients by Annual Income

$5,000or Less

2%

$5,001 -$15,000

$15,001 -$25,000

$25,001 -$35,000

$35,001 -$45,000

$45,001or More

24 orUnder

10%

25 to 34 35 to 44 45 to 54 55 to 64 65 orOlder

21%

31%

18%

12%

16%

31%

26%

17%

11%

5%

31%

20%

White/Caucasian

Other/Multiracial

30%

19%

Hispanic/Latino

Black/African

68% Female 32% Male

Client Demographics

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Total Expenses: $609,88570%

9%

Payroll

O�ce

6% Uncollected Loans

3% Cost of Services Provided

3% Professional Services

2%

2%

Interest

Other Expenses

2% Software & Technology

<1% Marketing & Advertising

<1% Travel & Meeting

2% Insurance

51%

17%

Grants

Donations

16% Interest

14% Fee for Service

2% Miscellaneous

Total Income: $419,202

Clients by Age

Clients by Gender Clients by Ethnicity

Clients by Annual Income

$5,000or Less

2%

$5,001 -$15,000

$15,001 -$25,000

$25,001 -$35,000

$35,001 -$45,000

$45,001or More

24 orUnder

10%

25 to 34 35 to 44 45 to 54 55 to 64 65 orOlder

21%

31%

18%

12%

16%

31%

26%

17%

11%

5%

31%

20%

White/Caucasian

Other/Multiracial

30%

19%

Hispanic/Latino

Black/African

68% Female 32% Male

Income/Expenses

You may be thinking, “Hey! Capital Good Fund spent more than they made. Why is that?” Well, two reasons. First, we received several large grants

in 2014 that we spent in 2015, so the income and expenses didn’t match up. And second, we invested a lot into our growth so that in 2016 and

beyond we could generate more revenue than ever. If you want more details, contact us!

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Board of Directors

Lee Hower, Chair start of 2015

Randall Rice, Chair end of 2015

Jason Jagatic, Treasurer

Mollie West, Secretary

Ana Silva

Gara Field

Gary Furtado

Jenn Steinfeld

Jim Bussiere

Joseph Holberg

Petra Jenkins

Staff

Active at Year End

Andy Posner, CEO

Libby Kimzey, COO

Charles Frumerie, Director of Comm.

José Fonseca, Director of Lending

Rachel Wall, Director of Coaching

Chadria Major-Thomas, Senior Loan O� cer

Elijah Peterson, Development O� cer

Heiry Borrell, Loan O� cer

Jeniff er Reid, Accounting O� cer

Laura Rijo, Loan O� cer

Patricia Rivera, Enrollment Coordinator

Saying Goodbye in 2015

Cameron Cunningham, VP, Connecticut

María Carranza, VP, Lending

Whitney Allard, Director of Finance

Quetrin Kunhardt, Senior Loan O� cer

Joselyn Nunez, Customer Service O� cer

Nicol Guerrero, Loan O� cer

Laura Fontaine, CT Programs Coordinator

Michael Jokubaitis, Underwriting Assistant

Americorps VISTAs

Ashley Gardner, Financial Coaching O� cer

Muna Idriss, Coaching Systems O� cer

Natasha Liriano, Financial Coaching O� cer

Fellows

Alejandro Knoepffl er

Alexandra Garcia

Andreas Nahas

Andrew Pett

Angelica Mercado

Carolyn Westphal

Christian Guerrero

Emily Marzo

Jael Mondestil

Julia Levy

Keith Andrade

Kimberly Truong

Matthew Dang

Meshach Johnson

Michael Nowosadko

Mintaka Angell

Niza Vinas

Octavian Goncalves

Sarah Pariser

Shyam Desai

Steve Muchiri

Steven Ortiz

Tyler Gomes

Wenjie Zheng

Interns

Christian Suarez

Darnell Weeks

Davina Metellus

Erik Sheeler

Phuong Truong

Who We Are

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Lots of Love

1414

Direct Public Offering (DPO) Committed Investors

GrantorsAllstate FoundationAmica Mutual Insurance CompanyBank NewportBank of AmericaBank RIBayCoast BankBerkshire Bank FoundationBlue Cross Blue Shield of Rhode IslandBrown UniversityCatholic Campaign for Human Development (Local)Coastway Cares Charitable Foundation

Community College of Rhode IslandCorporation for National & Community ServiceCOX CommunicationsDexter Donation FundFrederick C. Tanner Memorial FundKazanjian Economics FoundationNetwork for GoodOpportunity Finance NetworkOtto H. York Foundation Inc.Pawtucket Credit UnionRhode Island Foundation

St. Patrick ChurchSantander BankState Street Bank and TrustSunset Cove FoundationTACO/The White Family FoundationTD Charitable FoundationWashington Trust Charitable FoundationTrillium Asset ManagementTriMix FoundationUnited Way of Rhode Island

Our Supporters

Alan HassenfeldBarbara SilvisBarrett HazeltineBill AllenBill FoulkesChuck HollandDanny MusherElena Nicolella

Evan SeitzJames AmspacherJenn SteinfeldJessica DavidJohn McConnellMarie LangloisMark and Julie Van NoppenMichael Friedman

Peter Gill CasePeter SimonPetra JenkinsRebecca KislakRobert FalconSandra EnosSara EnrightTim DeChristopher

Donors: $500 & UpAlan HassenfeldAl Uluatam Barry Appel Bruce Van SaunJim Bussiere John Atkins John MayersLibby Kimzey

Lily WrayLorraine Barth Ludmila PosnerMichael RileyMichael TeshimaPatricia DavisPeter Gill CasePeter Rubenstein

Randall Rice Richard PosnerRonald RoudaSusan Chapman Tom Parkin & Tibby MurphyWilliam Ribich

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Donors: $100 to $499A. Raymond FrackeltonAaron Clayton-Dunn Albert BacaAna Silva Andy PosnerAndrew Roos Asli AsciogluBrian Castronovo Caroline EllisCarol Moran Claudia PradaDavid FisherDavid Martirano Don Pryor Ephraim & Rinata Shatz Gaurav Nakhare

James WitkinJoan Baca John Repoza Joseph HearnKate LyonsKenneth Boucher Leatrice Latts Leslie BenolielMarjorie PuglieseMicah PosnerMichael Levin Mitch BobrowMollie WestMolly SmyrlMustafa SafdarPetra Jenkins

Rebecca IngramRebecca KislakRicardo DiazRick Campbell Rick MettersRobert RugglesSara EnrightStella CarreraSuzanne LorienteBill KimzeyYolanda Honda

Our Supporters

Donors: Up to $99Rep. Aaron Regunberg Anne DicksonArlene VioletBarrett Hazeltine Carey Taylor-Noble Carlos HernandezCorey Rastello Daniel Harrop Danny Barth Darcy Pinkerton David PrestonDenise Louis Drew Tulchin Elaine Cabrales

Elan Babchuck Erik DuhaimeGabriel Pearlman Jacob Bobrow Jane McIntyreJennie PetersonJenny KassanJoseph Shure Jungwon Byun Kathryn Mazza Kurt Walters Mark Gray Matthew Plain Michael Klein

Nabeel GillaniPamela PerezPeggy SharpePeter MartinPhilip Posner Renée Ahlers Beckoff Sara AzoutVeronica Cintron Rep. Will Guzzardi

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Rhode Island FoundationThe Rhode Island Foundation is one of the nation’s largest and oldest community foundations. A forward-thinking and

generous funder, in 2015 the Rhode Island Foundation supported our work through a number of grants, including funds to

deliver Financial Coaching, improve our back-end systems, and incentivize on-time loan payments.

United Way of Rhode IslandThe United Way of Rhode Island (UWRI) is one of the oldest and most active funders of charitable organizations in the state. In

2015, UWRI built on their initial grant for our payday loan alternative program by providing additional funds to invest in the

people and systems needed for scale. In addition, United Way 2-1-1 has served as a signifi cant driver of client referrals, helping

to ensure the program’s success.

Kazanjian FoundationA new funder of ours, the Kazanjian Foundation’s mission is to promote economic understanding to all for greater happiness

and prosperity. Given this approach, our Financial Coaching + Schools program was a natural fi t, and we are thankful for their

support of—and belief in—the initiative.

CCHD LocalWe love the Catholic Church’s focus on the plight of the poor and their innumerable approaches to creating pathways out of

poverty. The Catholic Campaign for Human Development has funded us since day one and continued to support us in 2015.

We also partner with the Church to bring our services to members of local congregations, with a particular focus on loans for

immigration-related expenses.

Santander and Bank RISantander and Bank RI have been our partners for several years. In 2015, they stepped up their support to help us grow our

Financial Coaching program and make it possible for applicants to apply for and receive a loan without having to travel to

our offi ce.

Featured Partners

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Next Stop: FloridaPeople all over the country are in need of fi nancial assistance. Families

everywhere are being exploited by predatory fi nancial services. They’re

being charged outrageous interest rates by payday lenders. They’re being

sold junk cars at high markups by buy-here-pay-here car dealerships.

They’re living paycheck to paycheck and need fi nancial assistance to get

them out of the trap of high-interest debt. To fi ght these injustices, Capital

Good Fund plans to off er services to Florida residents in 2016. It’s the next

stop on the path to a fi nancially just America. 1818

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22 A StreetProvidence, RI 02907

p: 866-584-3651 | f: 866-254-0219

web: GoodFund.us | facebook: /CapitalGoodFund | twitter: /CGFund